Chapman Company obtains 100 percent of Abernethy Companys stock on January 1, 2020. As of that date, Abernethy has the following trial balance:

During 2020, Abernethy reported net income of $117,500 while declaring and paying dividends of $15,000. During 2021, Abernethy reported net income of $171,250 while declaring and paying dividends of $55,000.

Assume that Chapman Company acquired Abernethys common stock for $816,280 in cash. Assume that the equipment and long-term liabilities had fair values of $396,950 and $140,720, respectively, on the acquisition date. Chapman uses the initial value method to account for its investment.

Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. Prepare entry S to eliminate stockholders' equity accounts of subsidiary.

2. Prepare entry A to recognize allocations in connection with acquisition-date fair values.

3. Prepare entry I to eliminate intra-entity dividends.

4. Prepare entry E to recognize 2020 amortization expense.

5. Prepare entry *C to convert parent company figures to equity method.

6. Prepare entry S to eliminate stockholders' equity accounts of subsidiary for 2021.

7. Prepare entry A to recognize allocations attributed to specific accounts at acquisition date for 2021.

8. Prepare entry I to eliminate intra-entity dividends.

9. Prepare entry E to recognize 2021 amortization expense.

Debit Credit $ 57,300 $ 42,200 50,000 214,000 82,250 250,000 Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year remaining life) Cash and short-term investments Common stock Equipment (net) (5-year remaining life) Inventory Land Long-term liabilities (mature 12/31/23) Retained earnings, 1/1/20 Supplies Totals 375,000 90,500 117,000 170,000 409,650 16,000 $936,950 $ 936,950